Editing Strategic management (section)

{{Short description|Initiatives to enhance the performance of firms in external environments}}
In the field of [[management]], '''strategic management''' involves the formulation and implementation of the major goals and initiatives taken by an [[organization]]'s  managers on behalf of stakeholders, based on consideration of [[Resource management|resources]] and an assessment of the internal and external [[Market environment|environments]] in which the organization operates.<ref name="SMJ_Nag_2007">{{cite journal | journal= [[Strategic Management Journal]] | year=2007 |volume=28 | issue=9 | pages=935–955 | title= What is strategic management, really? Inductive derivation of a consensus definition of the field |author1=Nag, R. |author2= Hambrick, D. C. |author3=Chen, M.-J |doi= 10.1002/smj.615| citeseerx=10.1.1.491.7592 }}qn|date=June 2018</ref><ref>{{cite book| last1 = Alkhafaji| first1 = Abbass F.| year = 2003| title = Strategic Management: Formulation, Implementation, and Control in a Dynamic Environment| url = https://books.google.com/books?id=DVfhAQAAQBAJ| location = New York| publisher = Routledge| publication-date = 2013| isbn = 9781135186357| access-date = 2018-06-17 | quote = Strategic management is the process of assessing the corporation and its environment in order to meet the firm's long-term objectives of adapting and adjusting to its environment through manipulation of opportunities and reduction of threats.}}A corporation-oriented view</ref><ref>{{cite book| last1 = Courtney| first1 = Roger| title = Strategic Management for Voluntary Nonprofit Organizations| url = https://books.google.com/books?id=3krtbD3zKSEC| series = Routledge studies in the management of voluntary and non-profit organizations| volume = 5| location = London| publisher = Psychology Press | date = 2002| page = 8| isbn = 9780415250238| access-date = 2018-06-17| quote = [...] 'Strategic Management' as 'the process of strategic change' (Bowman and Asche 1987) or as 'the process of making and implementing strategic decisions', 'strategic decisions' being those 'that determine the overall direction of an enterprise and its ultimate viability in light of the ... changes that may occur in its  ... environments' (Quinn 1980).}}</ref><ref>{{Cite book|last=Pfeffer, Jeffrey 1946-|title=The external control of organizations : a resource dependence perspective|date=2009|publisher=Stanford Business Books|isbn=978-0-8047-4789-9|oclc=551900182}}</ref> Strategic management provides overall direction to an enterprise and involves specifying the organization's [[goal|objective]]s, developing [[policy|policies]] and [[plan]]s to achieve those objectives, and then allocating resources to implement the plans.<ref>[https://www.researchgate.net/publication/279958992_A_Simple_Approach_to_Strategic_Management A Simple Approach to Strategic Management A_Simple_Approach_to_Strategic_Management A Simple Approach to Strategic Management]</ref> Academics and practicing managers have developed numerous models and frameworks to assist in strategic decision-making in the context of complex environments and competitive dynamics.<ref name="Ghemawat1"/> Strategic management is not static in nature; the models can include a [[feedback|feedback loop]] to monitor execution and to inform the next round of planning.<ref>{{cite book| last1 = Hill| first1 = Charles W. L.| author-link1 = Charles W.L. Hill| last2 = Jones| first2 = Gareth R.| title = Strategic Management: An Integrated Approach| url =  https://books.google.com/books?id=Xax9awcoiDsC| edition = 10| location = Mason, Ohio| publisher = Cengage Learning| date = 2012| page = 21| isbn = 9781111825843| access-date = 2018-06-17
| quote = The feedback loop [...] indicates that strategic planning is ongoing; it never ends. Once a strategy has been implemented, its execution must be monitored [...]. This information and knowledge is returned to the corporate level through feedback loops, and becomes the input for the next round of strategy formulation and implementation.}}
</ref><ref>(Lamb, 1984:ix)</ref><ref>Lamb, Robert, Boyden ''Competitive strategic management'', Englewood Cliffs, NJ: Prentice-Hall, 1984</ref>

[[Michael Porter]] identifies three principles underlying strategy:<ref name="Porter, Michael E. 1996">{{cite journal |journal= [[Harvard Business Review]] |year=1996 |issue=November–December 1996|title= What is Strategy?|author= Porter, Michael E.}}</ref>

* creating a "[[uniqueness|unique]] and valuable [[Positioning (marketing)|[market] position]]"
* making trade-offs by choosing "what not to do"
* creating "fit" by aligning company activities with one another to support the chosen strategy.

'''Corporate strategy''' involves answering a key question from a [[Project portfolio management|portfolio]] perspective: "What business should we be in?" '''Business strategy''' involves answering the question: "How shall we compete in this business?"<ref name="Chaffee1985">{{cite journal |last1=Chaffee |first1=Ellen Earle |title=Three Models of Strategy |journal=Academy of Management Review |date=January 1985 |volume=10 |issue=1 |pages=89–98 |doi=10.5465/amr.1985.4277354}}</ref><ref>{{Cite book|date=2013-08-20|title=Playing to win: how strategy really works}}</ref> Alternatively, corporate strategy may be thought of as the strategic management of a [[corporation]] (a particular [[business entity|legal structure]] of a business), and business strategy as the strategic management of a [[business]].

[[Management theory]] and practice often make a distinction between ''strategic management'' and ''[[operational management]]'', where operational management is concerned primarily with improving [[efficiency]] and controlling [[costs]] within the boundaries set by the organization's [[strategy]].{{citation needed|date=June 2018}}